The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
KUALA LUMPUR (Dec 31): The FBM KLCI closed 1.49 points or 0.09% lower on the final trading day of the year today after investors took profit and as they evaluated China's weaker purchasing managers' index (PMI) data.
At Bursa Malaysia, the KLCI settled at 1,690.58 at 5pm for a year-to-date gain of 5.91%. Investors took profit today after the KLCI rose to its intraday high at 1,701.10 amid crude oil price gains.
At 5pm, the biggest decliners, in percentage terms, among the KLCI's 30 component stocks were Maxis Bhd and Hong Leong Financial Group Bhd while gainers were led by MISC Bhd and Sime Darby Bhd.
Maxis and Hong Leong Financial shares were down 2% and 1.59% respectively. MISC and Sime Darby Bhd gained 1.82% and 1.69% respectively.
On the KLCI, Inter-Pacific Research Sdn Bhd head of research Pong Teng Siew wrote in a note today: "If corporate earnings continue their disappointing trajectory and turn in flat for the year, our expectation (is) that the KLCI may fall to as low as 1,538 some time in 1H2019. This is still a developing scenario.
"Already, our plot of foreign funds’ net invested sums currently using Feb 2011 as a benchmark, has again swung over into deeply underweight levels. Why we fear fresh lows will be made for the KLCI is these allocations may yet get pared down to even more severely underweight levels during periods when the US economy is mired in a recession and/or a global crisis of some form unfolds."
Today, global investors took cue from China's PMI data and crude oil prices. Reuters reported that China's official PMI fell to 49.4 in December, below the critical 50-point level that separates growth from contraction, according to data released by the National Bureau of Statistics on Monday.
On crude oil markets, it was reported that prices rose about 2 percent on the final trading day of the year on Monday, mirroring gains in stock markets, but were on track for the first annual decline in three years amid lingering concerns of a persistent supply glut. It was reported that hints of progress on a possible US-China trade deal with US President Donald Trump saying he had a "very good call" with Chinese President Xi Jinping helped bolster sentiment for oil.
It was reported that Brent crude futures rose US$1.04, or about 2 percent, to US$54.25 a barrel by 0740 GMT while US West Texas Intermediate crude futures were at US$46.11 a barrel, up 78 cents, or 1.7 percent, from their last close.
Tomorrow (Jan 1, 2019), Malaysian markets will be closed for the New Year holiday. Trading resumes on Wednesday (Jan 2).
Source: The Edge
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